DRAFT CIRCULARS ON SERVICE TAX

The Central Board of Excise & Customs (CBEC) has issued two comprehensive and consolidated draft circulars;

• dealing with the procedural issues and 
• dealing with the scope of the taxable services.

The draft circular on procedural issues aims to consolidate the service tax procedural issues including those relating to availment and utilization of CENVAT credit in so far as they relate to service tax. This circular supersedes all previous circulars/ clarifications/instructions issued by on these subjects. It is however, clarified by CBEC that this circular intends only to clarify the scope of the Act and the rules and therefore in the event of any inadvertent inconsistency or contradiction between this circular and the provisions of the Act or the rules, the latter would prevail.
The draft circular on technical issues intends to cover technical issues relating to scope and classification of taxable services, levy of service tax and valuation of taxable services. This circular supersedes all circulars, clarifications and communications issued from time to time by the CBEC, DG (Service Tax) and various field formations on all technical issues including scope and classification of taxable services, valuation of taxable services, export of services, services received from outside India, scope of exemptions and all other matters on levy of service tax. With the issue of this circular, all the clarifications issued on technical issues relating to service tax stand withdrawn. The above two draft circulars were hosted on the website of CBEC for comments to reach it latest by 29th June 2007, now extended by 15 days.